The writings of H.L. Mencken — the Sage of Baltimore, the home of Agora Inc. — have been a constant companion for me since the start of my writing life. The brilliance, the language, the insight, the derring-do opinionating, the history, the astounding literacy — it’s all here, and it all flows seemingly without limit. All these features are combined in one mind and life, yet none of these features is the reason why it is important to read Mencken. The most important reason is that Mencken assists in the great struggle to free yourself from intellectual conventions and become a mature observer of the world.
[Read more...]A Grotesque Economic Experiment
May 16, 2013 by Leave a Comment
The newspapers and TV channels reported the Dow 15,000 story last week as though it were just a stepping stone on the way to 16,000… or 20,000… or 30,000.
Heck, the sky’s the limit!
Investors have reached a new level of bullishness. They’re borrowing again to buy stocks, confident that prices go in only one direction.
[Read more...]The Return of the Worldwide Crack Up Boom
May 6, 2013 by Leave a Comment
[A Daily Reckoning classique, originally broadcast on June 27, 2007...]
A kiss is still a kiss. A sigh is still a sigh…
And a bubble is still a bubble.
When a kiss is over, it’s over. When a bubble pops…well…that’s all she wrote! All kisses end – even the wettest “French” kisses. And so do all bubbles – even sloppy mega-bubbles of liquidity. This one will be no exception. But of course, it’s not the certainties that make life interesting…it’s the uncertainties – the known unknowns and the unknown unknowns, as Mr. Rumsfeld says. We are all born of woman and end up where all men born of women end up – dead. But that doesn’t mean we can’t have some fun between baptism and last rites.
[Read more...]A Currency for the Criminal Element
May 1, 2013 by Leave a Comment
A few weeks ago, we went to São Paulo, Brazil. There, too, we found taxi drivers who knew a lot more about monetary crises than the typical US economist. Said one:
“I remember. I was just a kid. But my father would call and tell us to run to the grocery store. He had just been paid. We’d dash for the grocery story, meet him there and buy everything we could. We spent every cent in just a few minutes.”
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How Money Buys Freedom
March 8, 2013 by Leave a Comment
“As long as I live under the capitalistic system, I expect to have my life influenced by the demands of moneyed people. But I will be damned if I propose to be at the beck and call of every itinerant scoundrel who has two cents to invest in a postage stamp. This, sir, is my resignation.”
[Read more...]Why Central Planning Fails
March 6, 2013 by Leave a Comment
The Dow is still rising. It rose another 38 points yesterday… apparently headed for a new record high.
Gold is dawdling.
We’re still thinking about how so many smart people came to believe things that aren’t true. Krugman, Stiglitz, Friedman, Bernanke — all seem to have a simpleton’s view of how the world works. They believe they can manipulate the future and make it better. Not just for themselves, but for everyone. Where did such a silly idea come from?
[Read more...]Failure of Leadership
February 12, 2013 by Leave a Comment
Poor Chuck Hagel. Every day, The Wall Street Journal wallops the fellow. He is whacked for not knowing what he is doing…smacked for not appreciating the threat of a nuclear Iran…and slapped hard for not bending over quickly enough to kiss neo-con butts.
John McCain and Lindsay Graham went to work on him in the Senate. They went at it clumsily and disgracefully — like a pair of goons with lead pipes. And then, in the WSJ, Dorothy Rabinowitz hammered him last Monday; she was so hysterical we couldn’t follow what she was talking about. Then, on Tuesday, Brett Stephens took over…and began pounding away in a more usual, ham-fisted way.
[Read more...]Revolving Zombies
February 4, 2013 by Leave a Comment
The defining characteristic of a zombified system is the way it hands out its rewards. In an honest economy, people do their best. They work hard. They take their chances. Some prevail because they are productive. Others are just lucky. The chips fall where they may.
But as the system is taken over by zombies, the chips fall where they are told to fall. Rather than to honest and efficient producers, the rewards go to those who curry favors.
[Read more...]Budget Cuts in the Irrational Financial System
January 24, 2011 by Leave a Comment
Gold down another $5 on Friday. Are you tempted to get out of gold now…and get back in, after the dip bottoms out?
Forget it.
The advantage of investing family money rather than personal money is that you have time on your side. You can sit tight and let the big trends make you big money… If you can get them right.
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New Life for the New Trade of the Decade
First, stocks hit new highs on Friday. Gold lost $22 per ounce.
But believe it or not, our new Trade of the Decade is going well.
As you may recall, we began a “Trade of the Decade” back at the start of the 21st century.
“Buy gold. Sell stocks.” That was it. No fancy straddles, hedges or derivatives. Not even any stock selection. Just a simple macro trade that you could stick with for the next 10 years.
[Read more...]Click for detailed story